New IRA Program Designed to Preserve Investor Assets Accumulated in 401(k)
Plans
NEW YORK, Dec. 20 /PRNewswire-FirstCall/ -- E*TRADE Securities LLC, a
wholly-owned subsidiary of E*TRADE FINANCIAL Corporation (NYSE: ET), today
announced it will provide IRA accounts to investors holding 401(k) assets that
fall under the September 2004 amendment to the Economic Growth and Tax Relief
Reconciliation (EGTRRA) Act of 2001. Beginning in March 2005, through an
exclusive agreement with rollover solutions provider Wealth Management
Systems, Inc., E*TRADE Securities will accept rollover assets from 401(k)
accounts belonging to participants who have changed or left their jobs and
missed their 401(k) rollover deadline. E*TRADE Securities is the first
brokerage firm to announce a program that will convert these 401(k) assets
into individual IRA accounts, providing employers and 401(k) plan
administrators with a convenient and cost-effective mechanism with which
rollover assets can be transferred to E*TRADE Securities.
The EGTRRA amendment was enacted to help preserve the assets of 401(k)
participants by limiting their exposure to penalties and taxes; and
approximately 361,000 former participants will be affected when the amendment
goes into effect on March 28, 2005(1). The amendment will require employers
to transfer the 401(k) assets, individually valued from $1,000 to $5,000, to
interest-bearing IRAs when rollover deadlines pass.
"E*TRADE FINANCIAL seeks business opportunities that allow us to uncover
value for consumers," said Lou Klobuchar, Chief Brokerage Officer and
President, E*TRADE Securities. "We're committed to delivering products like
the EGTRRA IRA program that will further distinguish us in the marketplace."
The program complements E*TRADE Securities' broad array of differentiated
and fully integrated investment solutions for active traders and long-term
investors, including:
-- First and only brokerage firm to offer a 50% rebate on 12b-1 mutual
fund fees(2)
-- Lowest cost stock index funds in the industry(3)
-- Professional, objective investment guidance from E*TRADE Securities'
Investment Specialist Group
-- An ETF (Exchange-Traded Funds) Center
-- The first "portable" mortgage, Mortgage on the Move(4)
-- Real-time cash transfers between internal and external financial
accounts(5)
About E*TRADE FINANCIAL
The E*TRADE FINANCIAL family of companies provides financial services
including brokerage, banking and lending for retail, corporate and
institutional customers. Securities products and services are offered by
E*TRADE Securities LLC (Member NASD/SIPC). Bank and lending products and
services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or
its subsidiaries. Bank deposits are FDIC-insured up to $100,000. Subject to
credit approval.
Important Notice
E*TRADE FINANCIAL and the E*TRADE FINANCIAL logo is a registered trademark
or trademark of E*TRADE FINANCIAL Corporation. The statements contained in
this news release that are forward-looking are based on current expectations
that are subject to a number of uncertainties and risks, and actual results
may differ materially. The uncertainties and risks include, but are not
limited to, changes in market activity, anticipated increases in the rate of
new customer acquisition, the conversion of new visitors to the site to
customers, the activity of customers and assets held at the institution,
seasonality, the development and enhancement of products and services,
competitive pressures (including price competition), system failures, economic
and political conditions, changes in consumer behavior and the introduction of
competing products having technological and/or other advantages. Further
information about these risks and uncertainties can be found in the
information included in the annual reports previously filed by E*TRADE Group,
Inc. or E*TRADE FINANCIAL Corporation with the SEC on Form 10-K (including
information under the caption "Risk Factors") and quarterly reports on Form
10-Q.
PLEASE READ THE IMPORTANT DISCLOSURES BELOW
You should consider the investment objectives, risks, charges, and
expenses of a mutual fund or exchange-traded fund carefully before investing.
The fund's prospectus contains this and other important information. For a
current prospectus, please visit etrade.com/mutualfunds. Read the prospectus
carefully before investing.
1. Employee Benefits Security Administration, US Department of Labor,
September 28, 2004.
2. For details and important information about the 12b-1 rebate program,
please visit etrade.com/fundrebate for a list of participating funds
and specific restrictions such as account eligibility, tax
consequences, and payment schedules. The E*TRADE Index Funds do not
charge 12b-1 fees and are not part of the rebate program.
3. For important information and details about the lowest cost E*TRADE
Index Funds, please visit http://www.etrade.com/funds. As commissioned by
E*TRADE Asset Management, Inc., Lipper determined that the E*TRADE
Index Funds had the lowest effective expenses as of December 1, 2004
by comparing them to other Pure Index Funds in the same Lipper
Investment Classifications/Objective, while excluding institutional
and other mutual funds requiring minimum investments of $250,000 or
more and exchange-traded funds. The E*TRADE Index Funds expenses are
the lowest because they are contractually limited through April 30,
2005. There is no assurance the expense limits will continue beyond
April 30, 2005.
4. For details and important information about the Mortgage on the Move
program, please visit http://www.mortgageonthemove.com where an explanation
of the restrictions of the program is provided.
5. For details and important information about the Quick Transfer
service, please visit etrade.com/quicktransfer where an explanation of
the capabilities and restrictions of the service is provided.
E*TRADE FINANCIAL Media Contact
Pam Erickson
E*TRADE FINANCIAL Corporation
617-296-6080
pam.erickson@etrade.com
E*TRADE FINANCIAL Investor Relations Contact
Adam Townsend
E*TRADE FINANCIAL Corporation
703-236-8719
adam.townsend@etrade.com
SOURCE E*TRADE FINANCIAL Corporation
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Related links:
http://www.etrade.com
CONTACT:
media, Pam Erickson, +1-617-296-6080, or
pam.erickson@etrade.com, or investors, Adam Townsend,
+1-703-236-8719, or adam.townsend@etrade.com, both of E*TRADE
FINANCIAL Corporation
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